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Chairman Yarmuth Statement on CBO Baseline

May 25, 2022

WASHINGTON, DC – Today, Kentucky Representative John Yarmuth, Chairman of the House Budget Committee, issued a statement following the release of the Congressional Budget Office’s (CBO) Budget and Economic Outlook and prior to the Budget Committee’s hearing tomorrow on the report:

“Today’s CBO report confirms that, under the leadership of President Biden and Congressional Democrats, our record-breaking recovery is building a stronger, more productive, and more resilient economy — with many indicators showing the best labor market for American workers in more than half a century,” said Chairman Yarmuth.

“With the help of the American Rescue Plan, CBO is now projecting that the unemployment rate will drop to 3.5 percent in 2023 — the lowest rate our country has seen in nearly seventy years and a full 1.2 percentage points lower than what CBO projected before the Rescue Plan. Revenues are the largest they have been as a share of the economy in more than two decades, which has led to a significant reduction in the 2022 deficit.

“Inflation from ongoing global supply chain issues, the continued impacts of the COVID pandemic, and Russia’s unprovoked war in Ukraine is our latest challenge. But thanks to the American Rescue Plan, working families and our economy are in a far better position to handle the impacts of rising prices.  

“As Democrats work to lower costs for families and oversee the fastest and most equitable recovery in recent memory, I look forward to discussing this outlook with Director Swagel at our hearing tomorrow.”

Tomorrow, Thursday, May 26, at 11:00 AM, the House Budget Committee will hold a virtual hearing with CBO Director Phillip Swagel on the latest baseline.

The reports estimates a 10-year projection of America’s economy and includes the following highlights:

  • CBO projects that real GDP growth will reach 3.1 percent in 2022, an increase from their previous projection of just 2.4 percent prior to the American Rescue Plan.
  • Revenues are projected to increase to 20 percent of GDP in 2022, up from 17 percent in the previous forecast, driven in part by the economic expansion.
  • The deficit in 2022 is projected to be 4.2 percent of GDP. This is a significant decrease considering the deficit was 12.4 percent of GDP in 2021. The deficit in 2022 is projected to be $1.7 trillion smaller than the 2021 deficit.
  • CBO forecasts that the unemployment rate will fall to 3.5 percent in 2023, the lowest rate our country has seen in nearly seventy years. Prior to the Rescue Plan, the February 2021 baseline projected a 4.7 percent unemployment rate in 2023. Now, the labor force is expected to recover to pre-pandemic levels by the end of 2022 and then grow more slowly after 2022.
  • CBO projects inflation will peak in 2022 before falling in 2023 and finally returning to normal levels for the rest of the decade.

The American Rescue Plan, sponsored and spearheaded in the House by Chairman Yarmuth, provided critical COVID relief and economic support to the American people while addressing the twin health and economic crises facing the United States.

As Chair of the House Budget Committee, Chairman Yarmuth is at the center of negotiations to enact the pro-growth and fiscally responsible investments outlined in President Biden’s Fiscal Year 2023 Budget to lower costs for families, create more opportunities for more Americans, and build on the successes of the American Rescue Plan.

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